Understanding the IPO Allotment Process: Timeline and Key Steps

Going public through an Initial Public Offering (IPO) is a significant milestone for any company. Understanding the IPO allotment process is crucial for both investors and companies. This article delves into the typical timeline and key steps involved in the IPO allotment process, helping investors and businesses navigate this complex process effectively.

Typical IPO Allotment Timeline

The IPO allotment process can vary but generally follows a structured timeline. Here's an overview:

IPO Subscription Period

The IPO subscription period typically lasts for 3 to 7 days. During this time, registered investors can submit their bids to purchase shares in the upcoming IPO. This period provides investors with the opportunity to assess the company's value, financial health, and market potential.

Allotment Process

Following the subscription period, the actual allotment of shares usually takes place within 1 to 2 days. During this process, the company and its underwriters evaluate the demand for the shares and determine the final allotment. Investors receive an allocation based on the number of shares available and the level of demand.

Refunds and Share Credit

For investors who are not allotted shares, the company or underwriters will refund any paid money within a week. If shares are allotted, they are usually credited to the demat account of the investor within a few days after the allotment. This ensures that investors receive their allotted shares or refunds in a timely manner.

Standard and Variable IPO Allotment Timelines

While following a standard timeline is typical, certain factors can affect the IPO allotment process. Below are some examples:

Standard Timeline: Generally, the IPO allotment process can take approximately 1 to 2 weeks from the end of the subscription period to the full completion of the process, including share credit and refunds. Number of Working Days: The IPO is usually open for 3 working days for subscription. After the subscription period, allotment typically takes 5 to 7 days. Refund and Share Crediting: Refunds for unsuccessful investors are usually processed within a week, and successful allotments are credited to demat accounts the next working day.

However, it's important to note that unforeseen circumstances or exceptional cases can result in variations in the IPO allotment timeline. For instance, in the case of ZOMATO, the IPO was initially scheduled to list on July 27, 2021, but the listing was preponed to July 23rd due to high demand.

Case Study: ZOMATO IPO Listing

A detailed examination of ZOMATO's IPO provides a real-life example of how the typical IPO allotment timeline can be affected by market conditions:

Subscription Period: The IPO for ZOMATO was opened for subscription from July 14th to July 16th, 2021. Allotment Release: Allotment was released on July 22nd, 2021. Listed Date: The company was initially scheduled to list on July 27, 2021, but the listing was preponed to July 23rd, 2021, due to high demand and positive investor interest.

Note on Disclaimer

The information provided is intended to promote financial literacy in India. Please consult a SEBI registered financial advisor for any investment or financial advisory services. Investors are solely responsible for their own decisions and funds.